As currencies around the world continue to drop in value against the US dollar more people are turning to crypto to preserve their purchasing power.
Crypto adoption has obviously been highest in countries facing hyperinflation like Turkey, but this adoption could spread as foreign currencies weaken further against the dollar.
This seems to be the real reason why Hydro Quebec is seeking approval from the Canadian government to cut the cord to crypto miners.
That’s because crypto mining doesn’t use that much power Just Around 0,01 percent of the world’s energy.
Crypto miners there are currently using around 270 megawatts of power every year, the most recent statistic I could find for Hydro Quebec suggests that it is producing over 40 000 megawatts of power every year.
This means crypto miners are using less than one percent of its annual output even so the Energy company is claiming that this supposedly excessive use of energy could threaten the province’s power grid when winter comes around.
Hydro Quebec is also concerned about the large energy contracts it has with crypto miners further in the future despite its own increase in output.
If you’ve been keeping up with the crypto headlines you’ll know the European Union also recently stated that it would put a pause on crypto mining in the event of an energy crisis.
The difference between Quebec and the EU is that the EU has next to no power, thanks to its ESG obsessions.
Now to be fair it’s easy to understand why Quebec and the EU are concerned Bitcoin’s hash rate continues to climb and that means that the difficulty to mine BTC is also increasing.
To the untrained eye it looks like Bitcoin’s energy consumption will continue to grow exponentially just like during previous Cycles.
If you look closely however you’ll notice that bitcoin’s hash rate has fallen by between 40 and 50 percent around the time BTC bottomed.
Save for the time Asics were introduced this makes sense because a crash in BTC’s price makes it less profitable to mine which in turn forces many Bitcoin miners to go bust.
The fact that Bitcoin’s hash rate hasn’t fallen yet is one of many signs that the BTC bottom is still coming.
This therefore begs the question of what if anything would cause Bitcoin’s hash rate to Fall by 40 to 50 percent a baseless.
Ban on Bitcoin mining in North America and Europe during the winter could well be the answer.